After several promises, innumerous rumours and and a failed pre-booking episode in 2016, Tesla is finally coming to India in 2021 and this time it’s official (or we hope so). Although Tesla, the US EV maker and world’s most valuable auto company has not released any official statement, all that has happened in the past couple of weeks raises our hopes for the Tesla entry in India by mid-2021.
While Elon Musk, the eclectic CEO of Tesla and world’s wealthiest individual wrote on Twitter “As promised” replying to a report stating Tesla’s entry in the country, the brand has also registered a office in Bengaluru, their first such on-ground office in the country. Not only this, India’s Union Minister for Road Transport and Highways, Nitin Gadkari, in a summit, confirmed Tesla’s plan.
Whatever the case might be, the thing which we can say with utmost confidence is that Tesla has to make India entry and they can’t ignore a goldmine of EVs given the recent push by Modi-led Indian government towards electric vehicles.
Now we are not here to discuss if Tesla will make India entry this year or not. We are here to discuss what vehicle will Tesla bring to India as and when they decide to sell cars in one of the world’s largest auto markets. Now we earlier reported that Tesla might start Indian ops with the Model 3 electric sedan, their most affordable product in the lineup.
Given the Indian markets affinity towards budget offerings, everyone is assuming Model 3 to enter India first. However, we would like to differ with the popular opinion and will stick out the neck to say Tesla, in all probability, will start their India ops with the Model Y crossover SUV. Here’s our justification-
Growing SUV market in India
All the trends, analysts and even the actual sales numbers have shown that SUVs have dethroned sedans to become the second most preferred body type in India after hatchbacks. While hatchbacks are limited to a price range below Rs 10 Lakh, SUVs of all size and shape are approved by Indian buyers. And not just in mass segment, but also in the luxury segments, SUVs have started to garner more buyers than sedan counterparts of similar price tag.
Assuming the trend will continue, it’s not wrong to say Tesla might bring Model Y instead of Model 3 as their first India offering.
Many analysts have predicted that Tesla’s Model Y pricing will emerge as a major disruptor in the world’s biggest car market, China. Tesla Inc started selling locally made Model Y SUVs in China this month, for almost a tenth less than gasoline-powered luxury cars with similar market positioning. The pricing for the Model Y starts at $52,376, while the Model 3 pricing starts close to upwards of $40,000 after several price cuts.
Since Tesla will enter India initially through CBU route, China factory could become the supplier and Tesla can revise Model Y pricing to match the Model 3 to tap potential buyers in India. Assuming all the import duties and subsidies EV makers get, Tesla Model Y could be priced around Rs 50 Lakh, a price range we were initially hoping Model 3 will get. Also, electric SUVs are all rage in India and the next big luxury electric SUV you can buy is Mercedes-Benz EQC which is priced around Rs 1 Crore, and Model Y can undercut it by half the price.
Tesla is expected to make “around or over half a million” vehicles in China this year. That represents a big increase from 2020, when Tesla produced around 150,000 cars. Tesla’s Model 3, which it has been making in China for over a year, outsold similarly positioned and more expensive Audi’s A4, BMW’s 3-series and Mercedes C-class in November, data from CPCA shows.
Model 3 is also in huge demand elsewhere and commands a huge waiting period. With Model Y production started at the Shanghai Plant, Tesla might think to bring Model Y due to production surplus and not Model 3 which it is struggling to supply.